PRODUCTION RESOURCE

Any resource used to make a product is considered a production resource. Such resources can include machine time, labor, or facilities. In general, a production resource will be available in limited quantities, thus planning activities must be undertaken to ensure that sufficient quantities of all resources are available when needed. For example, suppose a given product requires one hour of assembly time per unit in an assembly facility which has a total of eight hours capacity per day. If the company plans to produce more than eight units per day, then such a plan can be realized only if the assembly facility capacity is increased beyond eight hours per day.

Additional amounts of most resources can be obtained in the long run. Long-range capacity planning considers such resource additions through new construction. In the shorter term, capacity planning often must deal with available facilities: additional shifts, overtime, etc. are options for capacity increase in the short term.